Hungary to reduce VAT on prescription medicines to 0 percent

Starting September 1, Hungary will implement a change in the Value Added Tax (VAT) applied to certain medicinal products. According to a joint announcement from the Ministry of Finance and the National Tax and Customs Administration (NAV), the VAT rate will drop to 0 percent for medications that require a medical prescription.

This 0 percent rate also applies to human medicinal magistral preparations, which are products compounded in a pharmacy based on a specific formula. However, the tax exemption does not extend to over-the-counter medications, even if a doctor prescribes them to facilitate insurance support.

Other products, such as cosmetic magistral preparations and those intended for animal health, will remain subject to the 27 percent VAT rate. While pharmacies and wholesalers are primarily responsible for implementing these new rules, the authorities noted that consumers should be aware of which products qualify for the reduction.